L09 Analyzing Investment Projects

L09 Analyzing Investment Projects - Analyzing Investment...

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    Analyzing Investment Projects Net Present Value Estimates of Return on Investment
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    Objectives Understand Capital Budgeting To show how to use discounted cash  flow analysis to make decisions such  as: Whether to invest in new development  projects buildings or real estate Whether to enter a new line of business Whether to invest in equipment to reduce  costs
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    Capital Expenditures Use funds to acquire assets that either Generate future revenues Reduce future costs Long-term expenditure amortized over  time current  expenditures are completely written  off during the period the expense is  incurred.
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    Capital Expenditure in Sports Examples: New stadiums and arenas Upgrades to existing stadiums Luxury seating construction New turf for the playing surface New scoreboard systems New equipment Zamboni Computer systems
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    Capital Expenditure in Sports Reasons for Investment Replacement of worn out equipment Replacement with new technology Market competition Mandated by changes in the law ADA
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    Capital Expenditure Decisions Analyze potential expenditures to  decide which investments should be  made Comparison alternative projects to  determine the best return on investment  over time
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L09 Analyzing Investment Projects - Analyzing Investment...

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